Oil and gas group Faroe Petroleum has cut its losses in the first half of this year, due to higher output and sharper gas prices.

Losses before tax amounted to £3.8 million at the Aberdeen-based AIM listed company, down from the £6.1 million loss during the same period of last year.

At the same time, revenue surged to £9.27 million - more than 200 per cent above the £2.94 million earned during the first half of 2009.

In a Stock Market statement, John Bentley, chairman, said additional production - which totalled some 1,360 barrels of oil equivalent per day - and increasing gas prices helped to propel its revenue ahead.

"This has been an excellent period for us with outstanding exploration success, and Faroe is actively seeking further production acquisitions to balance its portfolio," he said.

During the first six months of the year, Faroe reported two successes in Norway; the Fogelberg gas and condensate discovery in April and the "significant" Maria oil discovery in July, which built on its two West of Shetland discoveries at the end of 2009.

Graham Stewart, chief executive, said: “We have made good progress in the period, with two significant exploration successes in Norway.

“Faroe has an exciting drilling programme ahead with five material wells expected per annum over the next two years alone.”

“The company is going through an important and exciting period of activity and growth, driven by an outstanding team confident of delivering further substantial value to our shareholders."

Faroe now has interests spanning three producing gas fields in the UK and two producing oil fields in Norway and shows no signs of slowing.

The company raised £65.2 million through its rights issue in April to fund its drilling programme, as well as apply for new licences and grow production.

Stewart said: "We are confident with our extensive firm and expected well programme, increased production and ongoing licence portfolio management, we will continue to grow the business and create further shareholder value.